Altera Corporation HOLD

ALTR : NASDAQ : US$32.93
Target: US$33.00

Altera Corporation provides a broad range of
programmable logic devices (PLD) to electronic system
manufacturers within the telecom and wireless,
networking, computer and storage, and industrial
automation, military and automotive market end
markets. It also offers HardCopy structured ASIC devices,
pre-defined design building blocks known as intellectual
property (IP) cores, and associated development tools

Technology — Hardware — Semiconductor Devices and Related
Investment recommendation
We remain HOLD rated for ALTR following a below consensus outlook
for the March quarter. With our estimates for both revenue and EPS
reduced, and lingering uncertainty for demand outside of wireless, we
expect the shares to be range bound. We are lowering our estimates and
our price target remains $33.
Investment highlights
ALTR reported Q4/13A (Dec) after the close. Revenues and EPS
were $454.4 million (+2% Q/Q) and $0.31 compared to our in line
estimates of $442M/$0.30. Management highlighted the sequential
revenue increase was driven mainly by growth in Industrial,
Computer and Broadcast coupled with flat Wireless.
Management guided Q1 revenue to be down 6% to down 2% Q/Q, a
midpoint of $436 million compared to our estimate of $448 million.
Revenue guidance includes expectation of growth in Telecom &
Wireless with growth in wireless offset by decline in Telecom,
coupled with flat Industrial, Military & Automotive sales and decline
in Networking, Computer & Storage and Other sales.
ALTR’s price target of $33 is 21x our C2014 EPS estimate of $1.38 plus
net cash of $4.70/share




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